a future strategy for open burning reduction in eastern europe/menu... · nordic environment...

A future strategy for Open Burning reduction in Eastern Europe

Henrik G. Forsström and Henrik Toremark

Nordic Environment Finance Corporation

Stockholm, August 14

1

Agenda

• NEFCO introduction

• BC emissions measurable

• Continued actions in Russia

• Extension of activities to Ukraine

• Typical farm in Tula

2

NEFCO in brief

• International financial institution established by the Nordic countries

• Loans and equity investments for environmental projects in Eastern Europe

• Funds a total of EUR 501 million

• Headquartered in Helsinki with 34 employees

• Locally contracted staff in Russia and Ukraine

• I

Helsinki

Geographic mandate

3

Gap filler. NEFCO fills financial gaps which are not covered by commercial banks.

4

Cost efficiency. NEFCO spends 1/8 of what it costs to reduce environmentally harmful emissions in the Nordic region.

5

Our products

• Loans

• Equity investments

• Export financing

• Grants

• Carbon credits

6

Agenda






7

Global context

Thinktanks, IFIs, academia

Financial support

Federal standards

Country

Legal and policy support

Regional input

Oblast’/krai

Training and education

Local perspective

Model farmers and farmers

Project implementation

Summary of possible stakeholder structure

Global Fire

Monitoring

center

Dokuchaev Soil

Science

Institute,

Moscow

Ukrainian Fire

Monitoring

Center, Kiev

Regional

research

instituions

Regional

authorities for

Land

Management

Outline a standard

emission model

International Cryosphere Climate Initative

The Russian Union of Farmers–

Regional branch

Bellona –

independent

non-profit

organization

Provide tasks to

network in Russia

NEFCO’s

Partner banks

The Ukrainian

Agri

Business

Club –

Farmers’ Union

and Market

research

Agrosoyuz –

Promoter of

innovative

agrimethods

Initiate stakeholder

cooperaton in Ukraine

NEFCO project coordination

Union of

Farmers –

Federal

organisation

Arctic Council

Nordic research institutions Nordic government offices

Bilateral cooperaiton Other financing parties

1 2 3

8

Satellite monitoring has limitations

• The field of Black Carbon and other SLCP emissions research is new

• Critical to develop a standard to quantify emissions as well as reliable conversion factors to other pollution

• Today, satellite monitoring prevails

+ Cost-effective way for frequent monitoring and trend mapping

– Systematic errors challenge reliability

• To improve results, visual on-the-ground monitoring is a pre-requisite

+ Maximising accuracy of monitoring, enforcement and evaluation of projects

– Time-consuming work lacking clear methodology

1

Source: Dokuchaev Soil Science Institute

9

On-ground monitoring incorporates local partners

• On-the-ground monitoring of fields in spring and

autumn as a complement to satellite monitoring

would be conducted in cooperation with global

and local (academic) experts:

– Arctic Council

– The Global Fire Monitoring Institute

(Freiburg)

– Dokuchaev Soil Science Institute (Moscow)

– Kiev National University of Life and

Environmental Sciences

1

Source: Dokuchaev Soil Science Institute

10

Agenda






11

Global context


Financial support

Federal standards

Country


Regional input

Oblast’/krai


Local perspective




Global Fire

Monitoring

center

Dokuchaev Soil

Science

Institute,

Moscow

Ukrainian Fire

Monitoring

Center, Kiev

Regional

research

instituions

Regional

authorities for

Land

Management

Outline a standard

emission model



Regional branch

Bellona –

independent

non-profit

organization

Provide tasks to

network in Russia

NEFCO’s

Partner banks

The Ukrainian

Agri

Business

Club –

Farmers’ Union

and Market

research

Agrosoyuz –

Promoter of

innovative

agrimethods




Union of

Farmers –

Federal

organisation

Arctic Council



1 2 3

12

Components in Russia

a. Legal and policy support

b. Education and training

c. Loan and grant financing

2

Source: NEFCO

13

a. Support enforcement of no-burn law

• Most efficient legal reform promotion is conducted through bilateral intergovernmental cooperation

• The project can mainly inform regional authorities;

– Larger-scale enforcements, better readiness to fight fires, increased penalties

– Target implementation of legal issue as in Krasnodarskiy krai

– Highlight Open burning by addressing related challenges to Russian authorities, i.e. methodology to calculate land management

– Bellona has successfully contributed to no-burn discussions over the past five years

• Challenge: fair to promote increased penalties in case farmers lack alternatives to burning – or better to simply promote increased enforcement?

2

14

b. Address 2-4 farms with an extensive no-burn training program

• Nordic expertise and local farmers’ unions – combination of seminar-based and on-farm training and advice

• As farmers priority is to increase yields, short-term economic incentives are key

• Many farmers consider low-tillage methods interesting, but lack capacity to introduce them

• (Nordic) know-how critical to introduce methods in a sustainable way and adapt an environmental business plan

• Feasible to initially target 2-4 ”model farms” per region to illustrate no-burn solutions in Russia

• Creating incentives not only for less progressive farmers, but also for forerunners

• Challenge: trust-issues with extension services and rivalry between farms

2

15

c. 6-8% interest on foreign equipment

• Small and medium size farmers (<2500 hectares) are to a large

extent using Russian-produced equipment due to financial

limitations

• Acquisition of new equipment and experiments with new

methods

• Foreign equipment (i.e. combines, seeders, collectors, choppers)

is required to introduce no-burn alternatives, including reduced

tillage practices

• Farmers would invest if the interest rate were 6-8%

• A grant component was common in earlier agricultural reforms

2

16

Agenda






17

Global context


Financial support

Federal standards

Country-level organisations


Regional input

Oblast’/krai-level organisations


Local perspective




Global Fire

Monitoring

center

Dokuchaev Soil

Science

Institute,

Moscow

Ukrainian Fire

Monitoring

Center, Kiev

Regional

research

instituions

Regional

authorities for

Land

Management

Outline a standard

emission model



Regional branch

Bellona –

independent

non-profit

organization

Provide tasks to

network in Russia

NEFCO’s

Partner banks

The Ukrainian

Agri

Business

Club –

Farmers’ Union

and Market

research

Agrosoyuz –

Promoter of

innovative

agrimethods




Union of

Farmers –

Federal

organisation

Arctic Council



1 2 3

18

Agricultural sector in Ukraine

• 70% of the total territory

• 27% of total exports

• 21-26% in interest rate

• Harvest in 2013 in million

tonnes:

– 62 of grain

– 35 of fruits and

vegetables

– 27 of energy crops

Ukraine’s largest

regions in terms of

total yields;

Dnepropetrovsk

Odessa

Kharkiv

Kirovohrad

Vinnytsa

Zaporozhia

Mykolaiv

Percentage of

high-fertility

soil in area

3

Source: Raiffesen Bank Ukraine

19

Extension of activities to Ukraine

• Similar approach as in Russia

• First steps:

a. Thoroughly examine short-term incentives

b. Research burning patterns and choose two-three pilot

regions

c. Introduce a cooperation with local partners

3

20

a. Short-term incentive to collect straw

• Broader approach:

– Reduced tillage practices

– More effective chopper equipment

– Collection of straw for bioenergy, bedding and feeding

• Advantages:

– Strong incentive due to exceptionally high energy tariffs

– Enables systematic on-farm solutions

– No-burn certification through Gold Standard Foundation (?)

– NEFCO partner bank agreements

3

21

b. Local cooperation to find model farms

• Scientific approach to map burning patterns in five-seven of the largest agricultural regions

– Number of agricultural and forest fires

– Are small, large or all farms burning equally? Which crops?

– On-ground monitoring by working with regional partners

• In the two pilot regions with different representative burning patterns, identification of medium and large farms by:

– The Ukrainian Agribusiness Club – a union for large farms and market research organisation

– Agrosoyuz – Ukraine’s primary promoter of innovative agricultural methods and certification

3

22

c. Good potential for environmental investments

• A majority of the farmers (including the large corporations) are to a large extent using Russian-produced equipment due to financial limitations

• Collection of straw is economically viable;

– Incentives to introduce renewable on-farm energy solutions

– Growing market for straw-based biofuels

• Farmers would invest if the interest rate was 6-9 %

• Large possibility to increase grant component due to in-flow of financial support from the multilateral development banks, IFIs and Intergovernmental bilateral cooperation

• Free-trade agreement on agricultural products scheduled to come into force in 2016

3

23

Agenda






24

Representative farm: Tula

• Located in Tula Region

• 1500 hectares, 70 employees

• Mainly potato and wheat, but also vegetables and fruits for farm needs; traditional tilling

• Burning occurs sometime between never and every two years

• Mix of Russian and foreign equipment

• Large energy costs for heating and storage

• Increase yields, increase lands, increase storage space, acquire equipment for reduced tillage practices, replace older Russian equipment

Source: NEFCO

25

Accomplishments and next steps

• Knowledge on when, why and how farmers in Russia burn

• Robust partner network in Russia

• Issue addressed in initial training and education to farmers

• Research on refinement of SLCP emissions methodology

• Identification of model farmers in Russia and Ukraine

• Mapping of burning patterns in regions in Ukraine

• Loan and grant financing program for investments in no-burn

alternatives

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Henrik G. Forsström │ [email protected] │ +358 10 6180 638

Henrik Toremark │ [email protected] │ +46 705 933468

www.nefco.org

twitter.com/NefcoNordic

youtube.com/nefcofinland

Thank you for listening!

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